Sales of flats are being blocked by valuers who are declaring them to be worthless until more is known about the external cladding material on the block.

Last week, EYE reported that thousands of sales of apartments have been stalled at a result of official guidance in the form of the Government’s Advice Note 14.

The guidance does not simply cover the type of cladding that was on Grenfell Tower, but extends to other materials including wood. The cladding may not even cover all, or even much, of the building, or be on the outside of the flat itself that is for sale – it may, for example, be on just a part of the penthouse – for valuers to attach nil value the property.

Dr Nigel Glen, CEO of trade body ARMA (the Association of Residential Managing Agents), has now told EYE: “An unintended consequence of Advice Note 14 is that valuers, upon seeing any combustible material on a building, are placing a holding value of £0 on a flat until they can more accurately determine what the material is and how much it could cost to remediate.

“It’s a technique used just to halt the mortgage application process and doesn’t necessarily mean that the flat is worthless.

“But of course when you see that as a leaseholder it’s a shock.

“There is a cross-industry working group, headed by RICS and with Government support, working through the problem, and we hope a solution to help unblock sales will be available very shortly.”

While Advice Note 14 says that suspect cladding material should be removed and tested, it is not clear who should be liable for the repairs.

According to the head of valuations at Barclays, Fiona Haggett: “The mortgage market has stopped for any flats that are clad.”

According to mortgage expert Andrew Montlake of Coreco, the situation could be creating a “new breed of mortgage prisoners” who bought in good faith but now can’t sell.

A fire at a block of student flats in Bolton at the weekend has further highlighted the situation, with the cladding of the building under suspicion.